Powell Spears, president of Cassidy Turley Harry K. Moore in Louisville, focuses largely on the industrial market. And that market in the key Kentucky city of Louisville is growing.
Spears said that the vacancy rate on Class-A industrial buildings is now below 4.5 percent in the Louisville area. And as of last May, the city had just two industrial spaces of more than 300,000 square feet available.
“Louisville did suffer during the economic downturn. But we didn’t suffer as badly as some other markets,” Spears said. “Overall, we have fared pretty well. When you compare us to our regional competition, places like Cincinnati, Indianapolis, Memphis and Nashville, we have done well during the downturn.”
Louisville’s industrial market, though, will look a lot different in the next 24 months.
That’s because developers have targeted the Louisville area in a big way.
UPS, which already operates the UPS Worldport air hub at the Louisville International Airport, recently purchased 100 acres at the city’s Renaissance South Business Park for a major expansion of its supply-side campus.
Chicago’s Verus Partners LLC has purchased 83.9 acres at the same business park and plans to build two 625,000-square-foot speculative warehouses. Dermody Properties has gotten in on the act, too. The Reno-based company has purchased a 36-acre site at the Settlers Point Business Park in nearby Shepherdsville. It plans to build a 624,000-square-foot spec industrial building here. The building is expected to open in the fourth quarter of 2014.
“If you total up everybody who says that they are going to build today, that is more than 3 million square feet of Class-A distribution space in the next 18 months. That is a little less than 10 percent of our existing total Class-A market being delivered.”
That begs a big question: Can the developers of all this new industrial space fill it?
No one can answer that yet, of course. But Spears says that many companies skip Louisville when looking for new homes. The reason? The Louisville area doesn’t yet have a enough existing facilities for these companies.
“A lot of people can’t wait nine months for a new building to be built,” Spears said. “I think in the next 18 months we will see some success. It will be tough to absorb all that new space in a market our size. But Louisville’s performance during the last downturn turned some heads. It gained us some attention. We are seeing a lot of interest out there in Louisville.”
